##### Degree of operating leverage

 Business & Finance Tutor: None Selected Time limit: 1 Day

The Poseidon Swim Company produces swim trunks. The average selling price for one of their swim trunks is \$81.78. The variable cost per unit is \$24.19, Poseidon Swim has average fixed costs per year of \$7,808.

Determine the degree of operating leverage for the level of production and sales 471 swim trunks.

Oct 3rd, 2015

Thank you for the opportunity to help you with your question!

 Sales (471 x \$81.78) \$38,518.38 Less: Variable Cost = (471 x \$24.19) -\$11,393.49 Contribution Margin \$27,124.89 Less:Fixed Cost -\$7,808.00 EBIT \$19,316.89 Degree of Operating Leverage = Contribution margin/EBIT 140.421%
Degree of operating leverage.xlsx

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Oct 3rd, 2015

Thanks again!

Oct 3rd, 2015

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Oct 3rd, 2015
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Oct 3rd, 2015
May 27th, 2017
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